Froya Fabrikker A$/$S of Bergen, Norway, is a small company that manufactures specialty heavy equipment for use in North Sea oil fields. The company uses a job$-$order costing system that applies manufacturing overhead cost to jobs on the basis of direct labor$-$hours. Its predetermined overhead rate was based on a cost formula that estimated $$395,600$ of manufacturing overhead for an estimated allocation base of $920$ direct labor$-$hours. The following transactions took place during the year: a$.$Raw materials purchased on account, $$290,000.$

b$.$Raw materials used in production $($all direct materials$),$ $$275,000.$

c$.$Utility bills incurred on account, $$77,000(90\%$ related to factory operations, and the remainder related to selling and administrative activities$).$

d$.$Accrued salary and wage costs: Direct labor $(970$ hours$)---$$ $320,000$

Indirect labor $---$$ $108,000$

Selling and administrative salaries $---$$ $200,000$ e$.$Maintenance costs incurred on account in the factory, $$72,000$

f$.$ Advertising costs incurred on account, $$154,000.$

g$.$ Depreciation was recorded for the year, $$90,000(75\%$ related to factory equipment, and the remainder related to selling and administrative equipment$).$

h$.$ Rental cost incurred on account, $$115,000(80\%$ related to factory facilities, and the remainder related to selling and administrative facilities$).$

i$.$ Manufacturing overhead cost was applied to jobs, $$?$

j$.$ Cost of goods manufactured for the year, $$950,000.$

k$.$ Sales for the year $($all on account$)$ totaled $$2,100,000.$ These goods cost $$980,000$ according to their job cost sheets. The balances in the inventory accounts at the beginning of the year were:

Raw Materials $ $48,000$

Work in Process $ $39,000$

Finished Goods $ $78,000$ Required:

$1.$ Prepare journal entries to record the preceding transactions.

$2.$ Post your entries to T$-$accounts. $($Don$$t forget to enter the beginning inventory balances above.$)$

$3.$ Prepare a schedule of cost of goods manufactured.

$4$A$.$ Prepare a journal entry to close any balance in the Manufacturing Overhead account to Cost of Goods Sold.

$4$B$.$ Prepare a schedule of cost of goods sold.

$5.$ Prepare an income statement for the year.